Business Law Study Set 13
Quiz 5 :
Government Regulation of Competition and Prices
Facts: • American Crystal Sugar Co.(Defendant) and other sugar refiners companies in California adopted fixed price for beets of similar quality • Mandeville Island (plaintiff) sold beets to the defendants for sugar refinery. However, they sued contending that the price for amongst the defendants is a violation of the Sherman Act, monopoly of the market (in this case monopsony, single buyer, is a more appropriate term) • The district court ruled in favor of plaintiff appeals court reversed, plaintiff appealed The Sherman Act is applicable in the present case on the following reasons: • The pricing of the beets were influenced by the group of the contractors and reduced the actual price of the beets • The uniform fixation of the prices should meet the minimum pricing expectations of the sugar beet growers • As the overall process of the growing takes place in the same state, the law would be applicable • The growers could recover the best price for the beets with the involvement of the federal bodies Thus, the Sherman Act is applicable and the growers could recover with the involvement of the law.
Case summary: Ms. PS who owns a coffee and tea exchange (café) has brought an antitrust suit against SB. PS stated that due to exclusive leases of SB, other coffee café owners are not capable of opening and running their cafes as SB had such a deals of lease with building owners that they cannot provide space in the same building for another coffee café. Also the cafes of SB are located very close to each other which create a loss for other cafes in that area. Antitrust laws stand for collection of federal and state laws to regulate and conduct organization of business corporations fairly and in competitive manner to benefit the consumers. Conclusion: Such an exclusive lease that SB deals with the building owners that prevents them to offer building space to other cafes is illegal and simple violation of any antitrust laws. This is because as per antitrust laws, business corporations have to run their businesses fairly and with competitiveness. And one cannot prevent other cafes and business corporations to set up at the same building to do business. Thus the exclusive lease deals that SB takes place with building owners is not at all permitted under law.
Case summary: Mr. DU holds a DD's franchise wherein as per the agreement he is required to use only those ingredients in the food items as furnished by DD. Also the paper napkins, cups and so on should depict trademark of DD. Conclusion: As per my opinion, this type of points and clauses in a franchise agreement is very normal because when a company provides franchisee for its branded products, it has to ensure that the products of food items it serves at the headquarters or the main café gets served even at all the franchise destinations too. This is the reason why franchise companies puts pressure for using stuffs that depicts trademark of its brand. Thus this type of requirements are not illegal tying but infact this way DD maintains its quality levels at a national level too and thus this type of tying arrangements are very significant for depicting the quality levels and trademarks for a company at a national and international level too.